Interview

Wimboh Santoso

Chairman of the Financial Services Authority

We are constantly working on customizing assorted avenues for investors to come in and remain active for the longer term in the form of financial sector deepening.

ASEAN BUSINESS LEADERS: Can you give us an introduction about yourself and your role here at the Financial Services Authority, locally known as the OJK?

WIMBOH SANTOSO: In the early 2000s, we reformed the banking sector in line with the global agenda. I was previously with Bank Indonesia as the policy-maker in the banking sector prior to the establishment of the OJK. At the time, we initiated the financial stability analysis report – a guidance on how to develop banking policy with other financial sectors considered such as commercial, retail, insurance, capital markets, etc. When OJK began its operations, information on all financial sectors could be easily accessed and managed as it came under one umbrella. OJK’s goal was ultimately aimed at having a complete analysis on the entire financial sector.

ASEAN BUSINESS LEADERS: During your tenure as Executive Director at the IMF, we understand that you were the one who initiated to table Indonesia as a host selection for the IMF meetings. What are some of the challenges faced during these discussions and how did you convince them that Indonesia was a great venue choice?

WIMBOH SANTOSO: First I started by benchmarking the facilities we have to offer with previous host countries such as Peru. Having successfully hosted the APEC meeting in 2013, the readiness of Bali to receive and meet the needs of the thousands of delegates are present, without disrupting the usual flow of tourists and local activities. The convention centre space and hotels in Bali were considered plentiful and completely equipped with the necessary amenities. We have taken every precaution and have shown track-record to ensure that Bali is secured. The accessibility and flight availability also enable delegates to explore other parts of Indonesia, for leisure or for business.

ASEAN BUSINESS LEADERS: The financial sector serves as a fundamental mechanism to ensure that investors’ funds are secured and invested appropriately, how do you see OJK’s role to transform and stabilize, to make the financial sector appear more reliable?

WIMBOH SANTOSO: Firstly, by default, we at the OJK must make sure that we remain strict on ensuring all the financial sectors are kept in-check. All capital invested needs to go through a structured process to assess if it is enough based on the international standards. We will monitor their liquidity closely and when the time is right, we need to present the fiscal incentives available to attract these investors to participate. For the financing of the medium to long term projects, we optimize the role of capital markets by using right issues on the equity, debt instruments such as bonds and hedging instruments. We are constantly working on customizing assorted avenues for investors to come in and remain active for the longer term in the form of financial sector deepening.

ASEAN BUSINESS LEADERS: The government has taken the lead to push for rapid infrastructure developments within Indonesia. Despite the current large allocation by the government, the need for foreign direct investments (FDI) by the private sectors is still key to continually drive these developments. How do you see Indonesia moving forward and how can OJK’s role improve the competitiveness of the financial sectors to attract more FDI into the country?

WIMBOH SANTOSO: As mentioned, the government has agreed to pledge part of its budget to fund projects not funded commercially by the private sector. To aid this further, officials have said that a new tax holiday will be designed and introduced soon by Indonesia’s Finance Minister Sri Mulyani Indrawati. This tax incentive will be given to companies targeting medium to longer term projects. We at OJK aim to prioritize these decisions based on the demand of the people. For instance, the development of housing will trigger a positive chain-reaction for the Indonesian economy. The OJK role would be to closely supervise these companies while the planning for the construction of high rise apartments are done based on the needs of the people in that given area. The increase in housing supply will encourage people to commute from the outskirts into the cities thus the demand for motor vehicles and public transport will increase as well. Other sectors such as the furniture and fittings will too benefit from this sequence of reactions. Leveraging on the population size of Indonesia and the growth in demand, investors can look forward to positive returns on their investments.

ASEAN BUSINESS LEADERS: Since its inception in 2011, OJK has been overseeing all activities within the financial sector in Indonesia in a fair and transparent manner. How do you intend to see the OJK’s role evolve in the coming years?

WIMBOH SANTOSO: OJK is the only institution authorised to supervise and to set up policies for the whole financial sector in Indonesia. Additionally, we are the only authority capable of protecting the customers interests. Hence, I would really hope to continue exercising this authority to provide contribution towards the financial stability, sustainable growth and the development of the country. Working alongside the government, we want to shape our practices to reflect our sincerity towards increasing people welfare.

ASEAN BUSINESS LEADERS: What would be your message of confidence for our 2 million readers at the Washington Post, and why should investors look into investing in Indonesia?

WIMBOH SANTOSO: Indonesia has the potential – our country is blessed with the abundance in natural resources, from mining to agriculture to fisheries. In terms of tourism, we have many picturesque destinations available to choose from. As compared to London, costs for accommodation, transportation, food and beverage in Indonesia are extremely affordable and of good quality. With further improvements by the government on connectivity, people can easily move between cities either by flight or by land transportation.

Indonesia is a large country with a young and vibrant population. Companies can consider invest in Indonesia as our labour is comparatively cheaper than of other countries. The increase in smartphone user penetration has allowed its people easier access to information and to keep up with the latest technology.

The government has also shown tremendous support on simplifying the process of doing business and accelerating the developments in infrastructure. In collaboration with the government, the OJK will continually revise and enhance the legal framework. We are here to give assurance, to protect and to convince the investor community that their interests are well protected. That is why investors should trust and invest on developing Indonesia, as a nation.